Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.
I’m Steve Greenfield from Automotive Ventures, and I’m glad that you could join us this week.
Ford Motor Company announced this week that it is merging FNV4, its project to develop a next-generation electrical architecture designed to unlock new functionality and upgradeability for both EVs and internal-combustion cars, with its existing architecture, seemingly confirming reports that the project has not gone as planned.
It’s another in a long, long line of false starts in the race for legacy automakers to develop true “software-defined vehicles” (or SDVs), and further proof of just how hard the task is.
But long term, the SDV vision will be worth the effort.
Software-first architectures reduce costs, increase flexibility and—perhaps most importantly—allow automakers to move faster, without being slowed down by a complex web of suppliers creating their own code.
Though becoming a leader in SDVs will be just as challenging as becoming an electric vehicle powerhouse, it’s also equally important. Consumers have had it with clunky, slow automotive technology, and the modern car is so computerized that a seamless electronic interface is an absolute necessity.
None of the legacy automakers has solved this problem yet. All of them have thrown billions at it. Only some of them will complete the transformation.
Dealers should be excited about the SDV future. As the vehicles get better at diagnosing their own issues, they will proactively communicate with the driver to help them get service work done at their local franchise dealership.
The Software Defined Vehicle should unlock dramatically more loyalty from a dealership’s vehicles in operation – and thus more revenue and profit through their parts and service departments, which just happen to also be the dealerships’ most profitable departments.
Our portfolio company WarrCloud’s data shows that the average franchise dealer loses about 70% of their service customers after the vehicle’s warranty period expires.
Cox Automotive data shows that service work being done at franchise dealers has decrease from about 45% of all vehicles in operation back in the 1960s, to just 30% today.
So for dealers, the Software Defined Vehicle future, and the fixed operations loyalty that it will drive, can’t come soon enough.
So, with that, let’s transition to Our Companies to Watch.
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, we showcase a company to watch, and we take the opportunity here on this segment each week to share that company with you.
Today, our new company to watch is Sell My Ride.
Sell My Ride allows consumers to sell their vehicles at a fair price, with a fast process.
Consumers get the best price for their car in 3 quick steps. They simply enter their details and get an instant offer. It’s that simple.
Dealers can partner with Sell My Ride to receive a significant source of cost-effective, high quality vehicles from consumers.
If you’d like to learn more about Sell My Ride you can check them out at www.SellMyRide.com
So that’s it for this week’s Future of Automotive segment.
If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our DealerFund.
Don’t forget to check out my first book, “The Future of Automotive Retail,” and my brand-new book, “The Future of Mobility”, both of which are now available on Amazon.com.
Thanks (as always) for your ongoing support and for tuning into CBT News for this week’s Future of Automotive segment. We’ll see you next week!
